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Gov. proposes changes to retirement benefits

The Lowell Sun

Updated:
01/12/2013 06:35:25 AM EST

By Matt Murphy

State House News Service

BOSTON -- Gov. Deval Patrick plans to file legislation within the next few weeks that would require state and municipal employees to wait until they are older and put in more years of service to qualify for retirement health benefits.

The reform plan will be based "substantially" on the recommendations of the Commission to Study Retiree Healthcare and Other Non-Pension Benefits. It is intended to cut future benefit costs by $20 billion over the next 30 years, according to administration officials. The state and municipal governments are looking at a total unfunded liability of more than $40 billion in the system over the next three decades.

Patrick plans to announce commission recommendations that were voted on in December have been finalized in a report that the administration will file with the Legislature.

The News Service reported in December that Patrick intended to file a retiree health benefit reform plan as part of his fiscal 2014 budget proposal due Jan. 23. The final report adopted on an 11-1 vote by the commission, which included members of the House and Senate as well as union officials, recommends increasing the age of eligibility for the majority of state employees in Group 1 from 55 to 60, in line with changes made in 2011 to the state pension system.

The commission also recommends increasing the required years of service in state or municipal government from 10 years to 20 years for an employee to qualify for retirement health benefits.

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The state currently pays 80 percent of a retiree's health insurance premiums. Under the new proposal, an employee with 20 years of service would be reimbursed 50 percent of their premiums costs, increasing to 80 percent for those with 30 years of service or more.

Sens. Jack Hart, D-Boston, and Michael Knapik, R-Westfield, and Reps. John Scibak, D-South Hadley, and F. Jay Barrows, R-Mansfield, also voted in favor of the recommendations.

Employees with 20 years of service who are within five years of retirement age would be exempt from the changes, as would employees within five years of qualifying for Medicare eligibility who are within one year of vesting in the state retirement system.

Teachers participating in Retirement Plus who are 57 or older and are eligible for their maximum retirement benefit would also not see any change to their benefits, and those on disability retirements would be exempt until January 2014 when national health reform kicks in, offering new subsidies for their insurance.

Employees 50 or older with 15 years of service, or 55 and older with 10 years of experience would be eligible to have 50 percent of their health premiums covered in retirement.

Shawn Duhamel, a commission member representing the Retired State, County and Municipal Employees Association, told the News Service in December that the proposal might be a "tough sell" to members, but a necessary change to protect the long-term viability of health benefits for workers.

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